On 21 May 2019 the European Commission sent a letter of formal notice to Ireland (and 11 other Member States) due to its alleged failure to transpose EU rules on electronic invoicing (“e-invoicing”) in public procurement and to implement the European e-invoicing standard by the required deadline.
European Directive 2014/55/EU on e-invoicing in public procurement obliges contracting authorities and contracting entities ‘to receive and process electronic invoices’ (so called “eInvoices”) compliant with the European Standard. The deadline for EU countries to transpose the Directive into their national laws and comply with the European standard on e-invoicing was 18 April 2019. While public bodies must be able to accept e-invoices by this deadline, there is no requirement on suppliers in Ireland to send electronic invoices to Irish public bodies. For the purpose of the Directive, “electronic invoice” means an invoice that has been issued, transmitted and received in a structured electronic format which allows for its automatic and electronic processing. The Directive establishes a European Standard or norm for eInvoicing as the structured electronic format that public bodies are obliged to receive and process. In general, the Directive applies to Member State contracting authorities and contracting entities as defined by the Directive 2014/24 and Directive 2014/25 and who are subject to public procurement law.
The European Commission (“Commission”) has identified eInvoicing as a key enabler in Europe’s move towards a Digital Single Market. EU countries and the European Commission decided to introduce a European Standard for e-invoicing in response to the many e-invoice formats used across the EU. It was felt by the Commission and EU member states that these varied formats caused unnecessary complexity and high costs for businesses and public entities. They agreed that the benefits of electronic invoicing are maximised when the generation, sending, transmission, reception and processing of an invoice can be fully automated. The move towards fully automated eInvoices should help public entities contribute to the modernisation of domestic payment infrastructure and reduce business costs. This is achieved by increased control over cash flow, reduced material cost and environmental impact, reduced data error and quicker and cheaper processing. The standardisation of electronic invoicing also complements efforts to promote the uptake of electronic procurement as reflected in the relevant provisions of Directive 2014/24/EU and Directive 2014/25/EU.
At a national level, the Office of Government Procurement (“OGP”) has established “eInvoicing Ireland” which is responsible for facilitating public bodies in becoming compliant with the e-invoicing Directive. Through the OGP, eInvoicing Ireland has established a procurement framework which provides public bodies with access to the services and solutions they need to reach compliance. Despite this framework now being live and available to public bodies the Commission has taken the view that Ireland has still not complied with its obligations and has taken steps to commence infringement proceedings.
The letter of formal notice will have requested further information from Ireland on its failure to transpose the new rules and forms the first step in the European Commission’s infringement procedure. The infringements procedure is governed by Article 258 of the Treaty on the Functioning of the European Union and has three stages: formal notice, reasoned opinion and referral to the Court. Ireland now has two months to respond to the European Commission’s arguments in its formal notice. Failure to do so may lead to the European Commission issuing a reasoned opinion. This is a formal request to comply with EU law and transpose the new rules. If Ireland still doesn't comply, the Commission may decide to refer the matter to the Court of Justice of the European Union.